Confirmed: The World’s Biggest Uranium Producer Just Got Bigger

Last August, I discussed how uranium production in world-leading nation Kazakhstan appeared to be rising, despite lower prices. 

And this week we got confirmation that 2015 was another record year for this uranium hotspot.

Kazakhstan’s state uranium miner Kazatomprom said Monday that the country’s output saw a substantial rise over the past year. With production jumping 4.3% in 2015, to 23,800 tonnes uranium (52.5 million pounds). 

That’s an increase of over 970 tonnes (2.1 million pounds) from the 22,829 tonnes that Kazakhstan produced in 2014. Showing that the mining industry here is continuing to expand, even as prices have languished below $40 per pound for the entirety of the past year. 

Such price levels however, appear to be entirely feasible for Kazakhstan’s uranium industry. Which enjoys some of the lowest production costs in the world, outside of Canada’s stellar Athabasca Basin. 

This is a case where geology and metallurgy come together to create world-leading production conditions. With Kazakhstan’s deposits having decent grades, generally above 0.1% uranium oxide — and also being amenable to sulfuric acid leaching, which is usually more effective than the alkaline leaching that must be used in places like the U.S.

That’s an important lesson in general for mining observers: there are a lot of different factors that go into determining a mine’s position on the global cost curve. But when the stars align, low production costs can keep an operation in demand even during market downturns like we’ve seen in uranium the last few years. 

A final interesting note from the Kazakhstan data is that production from state mining firm Kazatomprom itself actually declined in 2015. With the company producing 13,000 tonnes uranium during the past year, as compared to 13,156 tonnes in 2014. 

That suggests private enterprise in Kazakhstan is actually picking up the slack. No numbers were given on which firms were responsible for the overall production rise — but recent moves by Chinese firms into Kazakhstan could be helping. 

Watch for this to remain the world’s go-to producer as long as uranium prices stay subdued. 

Here’s to thriving in the lows,

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Dave Forest

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